Grad student makes $800,000 from iPhone apps

An ASU graduate student and his partner have made $800,000 in one year developing free iPhone applications and distributing them through their company

In less than two years, Michael Moon and Quoc Bui together have developed ideas for 22 apps with a combined 20 million downloads.

After brainstorming ideas for applications, they decided not to wait to learn code for applications but to go ahead and start a business, Moon and Bui said.

The two creators have focused on functional apps.

Some of their apps include Find Sex Offenders Free!; Crop for Free, a photo-cropping tool; and Flash for Free, an app that allows users to brighten their photos.

Their most successful app is Convert Units for Free, which does simple conversion like feet to inches and other units of measurement, Bui said.

At its peak, the conversion app was downloaded more than 100,000 times in one day around last Christmas, he said. It was rated No. 3 out of all the free iPhone apps available by iTunes.

“Rankings are key to how many downloads you get,” Bui said.

Developing free apps is a form of passive income, which means the duo gets about four cents from Google every time someone clicks on one of the banner ads that are displayed with the app, Bui said

The more times an app is downloaded, the more likely someone will click on an ad.

Moon said the team outsourced the development through Elance, an online company with headquarters located in California.

Outsourcing allows the team to “churn out ideas when we get them,” Moon said.

The company connects the team to developers all over the world who write the code for apps, Moon said.

Moon said if the team had done all of their own programming and graphic design, it might have taken two or three months to create a single mediocre app.

Outsourcing also allowed Moon to continue working and going to school online. Moon plans to graduate from the W. P. Carey School of Business with a master’s degree in business in June 2011.

He said he chose ASU’s online program because he wanted to stay in San Diego where he worked as a software engineer for Websense.

The team didn’t start to make good money until November 2009, but Bui quit his job as a software engineer in March 2009 when the business started.

“There wasn’t anything to be confident about,” Bui said. “It was a gamble.”

Bui said the industry is still young and there’s still plenty of opportunity for more people to get involved in the business.

“It doesn’t get any more complicated than knowing what you want on the app,” Moon said.

However, the team must sometimes pay several thousand dollars initially for the app to be developed, Moon said.

He said the risk in investing new apps isn’t really an issue for them.

The converter app made about $28,000 last month, Bui said.

“Getting lucky early on helped develop a huge user base,” Moon said.

The amount of money made on a free app can range from as little as $5 all the way up to thousands.

Justin Sung, the vice president for, the duo’s company, said that initially the team didn’t need any advertising.

“A lot of the success has been organic and viral,” Sung said.

After achieving success they thought paid marketing would be a good investment, he said.

The team also received an e-book deal. Moon and Bui’s book, “How to Make iPhone Apps with No Programming Experience,” is a guide to replicating their business model. It came out in April 2010.

Students at the New Media Innovation Lab at the Walter Cronkite School of Journalism and Mass Communication create apps for specific clients, said Andrew Gallo, a journalism senior who works in the lab.

He said he would continue developing his own apps after graduation.

“If we outsourced the design and development, we wouldn't be able to learn from our mistakes and go back to the drawing board to adapt our ideas to new elements,” Gallo said in an e-mail.

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